Why this Chinese telecommunications company with its 5G is a threat to freedom.
The trade war engaged by Donald Trump is really all about technology. It is the key issue in the clash between the USA and China that will decide the outcome of the 21st century. The core of this open rivalry is the new generation of cellular mobile communications called 5G. Unlike 4G, it marks a major technological breakthrough. It enables the continuous and instantaneous transmission of data, an indispensable precondition for applications that use artificial intelligence: industry 4.0, the Internet of things, self-driving vehicles, online medical care and teaching, drones, battlefield robots…
Just as Britain’s maritime supremacy gave it mastery over the world in the 19th century, the power behind 5G will control our 21st century world. It is able to recognize, divert and siphon off data, even destroy it or interrupt its transmission at any moment. This is why Huawei has become both the symbol and the main issue of the all-out technological war that the USA and China are waging. In just a decade, the company founded in 1987 by Ren Zhengfei, a former engineer in the Chinese army, rose to take first place in the cellphone network sector and second place in the smartphone sector (behind Samsung and ahead of Apple), based notably on its expenditure on R&D, which has reached $13.8 billion a year. It is the best example of how Western technology has been overtaken and of the globalization of a player in the Chinese military-industrial complex.
First of all, Huawei has greatly benefited from the support of the authorities in Beijing: protection on the domestic market, support for its pillaging of competitors’ technology, export support via the Bank of China for development and the new silk roads, and guaranteed immunity if corruption should be involved. Secondly, it is at the core of the program for digital surveillance of the Chinese population through the social credit system and works in close collaboration with Beijing’s security machine. And it does this with the backing of Article 7 of a law passed in 2017, a real legal loophole that obliges individuals and companies to cooperate with the Chinese intelligence services and forbids them to divulge that any such exchanges have taken place.
The American riposte has matched the level of importance of the issue. It targets all company bosses who have several passports to protect themselves vis-à-vis Beijing and who now know that they are taking risks outside China. The USA intends to prevent Chinese technology from gaining access to certain essential components, especially semi-conductors. After closing its market to Huawei in 2012, the USA has continued to exclude it from invitations to tenders issued by allies, by the use of threats to its business or the revocation of safety guarantees. This strategy has been followed in Australia, New Zealand, the UK, Canada, Poland and even Germany. Within China itself, the American offensive against Huawei aims to accentuate tensions between the public sector and the private sector – which is reluctant to finance the “Made in China 2025” program – and to provide encouragement to opponents of Xi Jinping, who reproach him for having defied the USA ten years too soon by abandoning the cautious line taken by Deng Xiaoping.
The USA’s desire to stop Huawei from dominating the age of data and to hold China back in its race to attain technological hegemony for its state-capitalism is well founded. However, it is weakened by the absence of any American competitor in the 5G field, by the vagaries of Donald Trump – who, as he did for ZTE (the telecommunications and systems supplier), and after the budget paralysis fiasco, is being tempted to favor a fake trade agreement with China before 1st March for electoral reasons – and by the deep divisions in democracies caused by the swing to nationalism and protectionism in the USA.
Europe is in a paradoxical situation. It has two main assets in its huge market of 500 million consumers and in its leading telecommunications companies, Nokia-Alcatel and Ericsson. But, for the time being, it is merely an adjustment variable, squeezed between the GAFAM and Huawei, ZTE, Tencent, etc. The European elections must therefore be the platform for debate about a digital strategy that combines the regulation and taxation of the GAFAM, the exclusion of Huawei, strict controls of any Chinese investment that gives China control of digital assets, and massive support for Nokia and Ericsson so as to avoid any delay in the deployment of 5G on our continent. A Chinese technological monopoly would be a death threat to political freedom, as it would bring about an alliance between state-capitalism and artificial intelligence. It is therefore perfectly legitimate for democracies to put an end to Huawei’s dominance of 5G. But, above all, they must take up China’s technological challenge and return to long-term investment and innovation, both of which make good sense and should be used in defense of freedom and human dignity.
(Column published in Le Point, 7th February 2019)